By |March 22, 2011

Santa Ana City Council approved chipping $7,500 toward a pool among cities across the state that would pay for a legal challenge against Gov. Jerry Brown’s proposal to ax redevelopment agencies.

If the legislature signs off on Brown’s plan, the lawsuit would be “ready to go in the very near future,” said California League of Cities Executive Director Chris McKenzie.

“It takes some time to get this planned, and the impacts — if the legislation passes — will be so devastating and so dramatic that we wanted to get ready in the event that it happened,” McKenzie said.

Cities’ redevelopment agencies leverage property tax increment dollars to pay for building and other improvements in blighted areas. Eliminating redevelopment agencies would hit Santa Ana particularly hard, as thousands of acres in the city are in redevelopment zones.

Eliminating the state’s 400 redevelopment agencies is just one vote away from passing in the state assembly, where a 2/3 majority of is needed to pass the proposal. Lawmakers are expected this week to try and shore up that last vote. If they are successful, the plans heads for another legislative vote at the state senate.

Contributing funds toward a potential lawsuit, which according to McKenzie would be a co-effort between the league and the California Redevelopment Association, is not all cities are doing to save redevelopment dollars.

Cities statewide — including Santa Ana and Irvine in Orange County — are maneuvering to protect their redevelopment assets by transferring cash and property over to cities and committing future property tax increment dollars.

The logic behind the maneuvering is that Brown’s proposal to divert redevelopment money to other local agencies generally does not include funds that have already been obligated.

The Orange County Register reported Monday that cities in the state issued a total of $700 million in bonds between Jan. 1 and March 8. Of those, Santa Ana issued the most in bonds, having sold bonds worth $66.8 million, the Register reported.